Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2018 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (2) TMI 882 - HC - Income TaxIncome from sale of shares - busniss income or capital gain - Held that:- The decisions of the Court have emphasized five broad tests whether the income bears the character of business income or capital gain – firstly, whether the company or concern is authorized in its Memorandum of constituting documents to deal with shares; (2) whether the entity had shown the shares under the head “Investment”; (3) whether the assessee/entity utilized its own funds and had not borrowed funds for the purpose of acquiring shares; (4) whether the nature of infrastructure – whether it is small, represents investment activity rather than the trading activity that would require larger infrastcuture; and lastly, whether the behaviour of the assessee is such as to disclose income/earning has objective i.e. “obtaining dividend” rather than trading. This Court notes that all the tests and the relevant rulings were noticed by both the authorities below, who had applied their mind and held that the AO’s approach in singular fixing scrutiny to the shifting and regulations of some shares to treat as business income, was erroneous. Reporting of mercantile interest of doubtful debts - Held that:- The question is covered by the decision of this Court in Commissioner of Income Tax Vs. Vasisth Chay Vyapar Ltd. (2010 (11) TMI 88 - Delhi High Court). The Court had applied “real income” principle to uphold the assessee’s contention. Those observations are squarely applicable in the present case.
|